Japan's Olympus admits wrongdoing in accounting scandal

In the latest in a series of admissions, company officials, reversing earlier denials of any wrongdoing, acknowledged Tuesday that they hid massive losses over more than two decades by covering them up with a series of acquisitions.

Experts say the case may be the biggest accounting fraud in Japanese history, bringing the worst damage to the nation's corporate image since news broke of systematic defects in the construction of vehicles built by the Toyota Motor Corp.

The Olympus scandal first broke last month when news surfaced that the company, which also makes medical equipment, made a $687-million payment for financial advice and expensive acquisitions of companies with little or no business relevance.

The revelation has since brought a skein of resignations to placate angry shareholders, a list that included Chairman Tsuyoshi Kikukawa. But the company had always denied making any such payments.

That changed Tuesday when Olympus a statement detailing the findings of an independent panel that uncovered evidence that the payment and acquisitions were used to cover up losses on investments dating back nearly 20 years.

Then more heads rolled, with the firm dismissing executive vice president Hisashi Mori, who was allegedly involved in the coverup along with a company auditor who Olympus said has resigned.

The company statement stressed that officials "will continue to cooperate fully with the panel and do our best to get to the bottom of this." Still, the mea culpa could not stop Olympus shares from falling by nearly 30% in Tokyo on Tuesday.

The controversy was brought on by revelations made by a whistle-blower -– former Olympus CEO Michael Woodford -– who has given evidence to investigators in Britain and the U.S.

The British national claims that he was fired by Olympus when he questioned the $687-million fee as well as the prices Olympus paid for buying three small bankrupt Japanese companies between 2006 and 2008.

Experts say the illegal payments are the result of weak corporate oversight in Japan, with too few independent directors on company boards.